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Exhibit
10.4
EMPLOYMENT
AGREEMENT
(as amended
January 4, 2008)
This Employment Agreement
(this “ Agreement ”) has been made
and entered into as of the 2 nd day of March 2005, by and between Hungarian Telephone and Cable
Corp., a corporation organized under the laws of the State of
Delaware, United States of America (the “
Company ”) and Peter T. Noone (“
Employee ”). The Agreement has been
amended as of the 22 nd day
of April 2005 and as of the 4 th day of January 2008, for the purpose carrying out the original
intentions of the Company and Employee and ensuring compliance with
Section 409A of the United States Internal Revenue Code of
1986, as amended, and the rules, regulations and guidance
thereunder (collectively, “ Section 409A
”).
RECITALS:
A. The Employee and Company
are parties to an employment agreement dated as of January 2,
2003.
B. The Company desires to
retain Employee as its General Counsel and Secretary. Employee
desires to work for the Company as its General Counsel and
Secretary.
C. The parties desire to
terminate the existing employment agreement and enter a new
employment agreement and set forth herein in this new employment
agreement the terms and conditions under which Employee shall serve
in the above-stated capacity of General Counsel and
Secretary.
NOW, THEREFORE, in
consideration of the respective covenants and agreements of the
parties set forth herein, it is agreed as follows:
1. Employment and
Duties . The Company agrees to employ Employee and Employee
accepts the employment, subject to the terms and conditions herein,
to serve as General Counsel and Secretary of the Company.
Employee’s duties and responsibilities shall include the
duties and responsibilities as set forth by the Company, in all
cases consistent with Employee’s position. Employee shall
perform faithfully the duties assigned to him to the best of his
ability.
2. Place of Employment
. Employee shall be employed out of the Company’s United
States office located in Seattle, Washington.
3. Term . This
agreement shall have an indefinite term and shall continue
indefinitely unless terminated pursuant to Section 12 hereof
(the “ Employment Period
”).
4. Salary . Employee
will receive a monthly salary based on an annualized rate of two
hundred forty-six thousand dollars ($246,000.00) for 2007. For
subsequent calendar years, provided Employee has performed his
duties satisfactorily, Employee shall be entitled to an increase in
his base salary that shall not be less than the annual change in
the United States Consumer Price Index for the prior
year.
5. Allowances . At the
Employee’s discretion, the Company shall grant Employee the
following allowances which shall be deducted from the annual
salary: (i) an annual allowance of up to $3,940 per year to
purchase life insurance for which Employee or a trust set up by
Employee shall be the owner and which insurance shall benefit
Employee’s family upon Employee’s death, and
(ii) an allowance of up to $3,500 to be used by Employee for
Employee or any member of Employee’s family to cover amounts
not covered by Employee’s health or dental
insurance.
6. Performance Bonus .
Employee shall be eligible to receive a bonus if the Company, in
its sole discretion, decides to reward Employee for his
performance. Any such bonus shall be paid at the Company’s
discretion in either (i) cash, (ii) the Company’s
stock, (iii) additional options to purchase the
Company’s stock, (iv) any combination of cash, stock or
options, or (v) such other form of consideration as the
Company shall determine.
7. Stock Options .
Provided Employee has maintained continuous service with the
Company through the first business day of each calendar year, the
Company shall annually grant to Employee on the first business day
of each calendar year, options from the Company’s 2004
Long-Term Incentive Plan (the “ Plan
”) to purchase at least 20,000 shares of the Company’s
common stock at an exercise price equal to the market price of the
Company’s common stock on the date of grant as determined by
the Plan. Such options shall have a ten-year exercise
period.
8. Employee Taxes .
Employee shall be solely responsible for any and all of
Employee’s portion of any (i) income and
(ii) social security, medicare or any other miscellaneous
taxes applicable to any salary, bonus, option grant, stock grant,
allowance, severance benefit, or any other type of compensation or
benefit received by Employee pursuant to this Agreement which is
subject to taxation and payable to any governmental taxing
authority.
9. Health and Dental
Insurance . The Company will provide Employee, his spouse and
his minor dependents with health and dental insurance coverage
provided such persons meet any coverage requirements that the
Company’s insurance carrier may require.
10. Vacation .
Employee will be entitled to twenty (25) days annual paid
vacation.
11. Confidential
Information .
(a) Nondisclosure .
Employee expressly covenants and agrees that he will not during the
term of this Agreement or at any time after the termination hereof,
irrespective of the time, manner, or cause of termination, reveal,
divulge, disclose, or communicate to any person, firm, or
corporation, other than authorized officers, directors, and
employees of the Company, in any manner whatsoever, any
“confidential information” (as hereinafter defined) of
the Company that would be inconsistent with the position held by
Employee or the duties being performed by Employee at the direction
of the Company.
2
(b) Return of Confidential
Information and Other Property . Upon termination of this
Agreement, Employee will surrender to the Company all confidential
information including, without limitation, all lists, charts,
schedules, reports, financial statements, books and records, and
all copies thereof, of the Company and all other property belonging
to the Company whatsoever. As used herein, “confidential
information” means information disclosed to or known by
Employee as a consequence of or through his employment for the
Company, not generally known in the business in which the Company
is or may become engaged, about the Company, its business, products
and processes.
(c) Breach of
Confidentiality Provision . Employee agrees that a substantial
violation on his part of this confidentiality covenant will cause
such damage to the Company as will be irreparable and for that
reason, Employee further agrees that the Company shall be entitled
as a matter of right, to an injunction out of any court of
competent jurisdiction, restraining any further violation of said
covenant by Employee, his employer, employees, partners, or agents.
Such right to injunction shall be cumulative and in addition to
whatever other remedies the Company may have, including,
specifically, recovery of liquidated and additional damages.
Employee expressly acknowledges and agrees that the respective
covenants and agreements shall be construed in such a manner as to
be enforceable under applicable laws if a more limited scope of
time is determined by a court or competent jurisdiction to be
required.
12. Termination
.
(a) Reasons for
Termination . The employment of Employee with the Company shall
terminate automatically upon Employee’s death and may be
terminated by written notice.
(i) by the Company, upon
Employee’s disability which renders him unable to perform his
usual and customary duties for a period of 180 consecutive
days;
(ii) by the Company without
“cause” upon 180 days (6 months) notice
“cause” is hereinafter defined);
(iii) by the Company with
“cause” without notice;
(iv) by Employee upon 90 days
(3 months) notice; or
(v) by Employee for
“Good Reason” upon one month notice. “
Good Reason ” means (1) a
diminution in Employee’s responsibilities, duties, titles or
reporting lines; or (2) a reduction in Employee’s salary
or bonus opportunity or a material reduction in Employee’s
other benefits; or (3) requiring Employee to be based at a
location more than 50 miles from Seattle, Washington; or
(4) the Company’s failure to pay Employee any material
amount that is due to Employee under this Agreement;
provided , however , that none of the events or
circumstances set forth in clauses (1) through (4) of
this Paragraph 12(a)(v) shall constitute Good Reason unless
Employee has provided notice to the Company of such event or
circumstance within 90 days of the initial existence of the event
or circumstance, and the Company has failed to remedy such event or
circumstance within 30 days of its receipt of such
notice.
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For purposes of this
Agreement, “cause” shall mean (i) a failure by
Employee to substantially perform Employee’s reasonable and
legal duties and as defined by goals established by the Company and
agreed to by Employee, other than a failure resulting from
Employee’s complete or partial incapacity due to physical or
mental illness or impairment, (ii) a willful act by Employee
that constitutes gross misconduct and that is injurious to the
Company, (iii) a willful breach by Employee of a material
provision of this Agreement, or (iv) a material and willful
violation of a federal or state law or regulation applicable to the
business of the Company. No act, or failure to act, by Employee
shall be considered “willful” unless committed without
good faith and without a reasonable belief that the act or omission
was in the Company’s best interest.
For purposes of this
Agre
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